Home

  Questions and Answers

  Previous Articles

  Information requests:

  e-mail: kluskin@bloomberg.net
 

  Intrinsic Value Asset 

  Management, Inc.
  P.O. Box 2415

  Malibu, CA 90265

Fertile Stock?

Ken Luskin is a breed of money manager one used to see more of before blue chips and tech stocks sucked the oxygen out of the room for all other kinds of stocks: That is, a manager who assembles a stake in a small- or mid-cap company with a good story, and who then patiently waits for Wall Street to discover the gem-in-the-rough.

Now, finally, the mid-caps and even small caps are outperforming the blue chips. A change may be in the winds.

Moreover, Luskin recently earned some bragging rights when he advised (in this column) buying Alhambra- based Ortel Corp. in the $6- a-share range. The stock ended up trading at more than $180 a share, before being bought at about $160 by Lucent Technologies Inc.

OK, that's nice, but what's the encore? Now Luskin likes a little stock named Conceptus Inc., so much so that his money management shop, Malibu-based Intrinsic Value Asset Management, has filed papers with the Securities and Exchange Commission and taken a 17 percent stake in the company, but has no plans to take control or board seats.

The smallish, not-yet-profitable Conceptus (market capitalization of $60 million) has a new, lower-cost, minimally invasive method of permanent, birth control, already being sold commercially in Europe and Asia. In the United States, the company has successfully completed the first- and second-phase FDA-mandated testing of the procedure, which involves placing a small coil in the fallopian tubes, in an outpatient procedure. Third (and final) phase testing is started to begin soon.

“The Conceptus method costs about one- third as much” as a tubal ligation, said Luskin. “And we know from watching FDA testing announcements, no one else has a product going to market like this.”

All over the world, women need and want an inexpensive method of permanent birth control, which has no side-effects, said Luskin.

But small biotech companies are a dime a dozen, and usually they need the marketing and distribution heft of a big outfit to penetrate world markets. Is a merger on horizon for Conceptus?

“Well, you might see that here,” said Luskin. "But I wouldn't vote to sell this stock for anything less than $50.” As of last week, it was selling for about $5.25 a share.

With a growing portion of the San-Carlos-based Conceptus stock in his hands, it may indeed be Luskin who becomes arbiter of when to sell Conceptus.